Topic: Internal Security
Q6. “Financial networks are the backbone of modern terrorism.” Analyse the sources of terror financing. Examine India’s institutional mechanisms to curb it. Suggest improvements in the existing framework. (15 M)
Difficulty Level: Medium
Reference: InsightsIAS
Why the question
Rising concerns over terror financing networks, evolving digital channels and India’s commitments under FATF standards make financial disruption central to internal security discourse.Key Demand of the question
The question requires analysing how financial systems sustain terrorism, identifying major sources of terror financing, and evaluating India’s institutional response along with suggesting improvements.Structure of the Answer:
Introduction
Briefly highlight how modern terrorism is increasingly finance-driven rather than purely violence-driven, making financial networks the core enabler.Body
- Financial networks as backbone: Show how funding sustains operations, decentralisation and global linkages of terrorism.
- Sources of terror financing: Identify key channels such as state support, criminal activities, informal systems and emerging digital modes.
- India’s institutional mechanisms: Briefly mention legal, investigative and coordination frameworks addressing terror financing.
- Suggestions for improvement: Indicate need for technological strengthening, better coordination and regulatory reforms.
Conclusion
Emphasise that cutting financial lifelines is the most effective long-term counter-terror strategy, requiring adaptive and integrated approaches.
